Crypto is about more than just Bitcoin. This quick reference guide will help you learn the differences between the various types of crypto assets that currently exist.

Cryptocurrencies

Cryptocurrencies are digital currencies that use blockchain technology to encrypt, regulate, and verify the transfer of funds between people. The most well-known cryptocurrency is Bitcoin (BTC), but there are also thousands of alternative coins (“altcoins”) currently in circulation. These are often used as a store of value or as payment.

Stablecoins

Stablecoins are digital currencies that are pegged to an already-established currency in order to reduce the amount of volatility that comes along with cryptocurrencies. Tether (USDT) is a stablecoin that is backed by the U.S. dollar. Some stablecoins are backed by commodities instead of fiat currency, like Digix (DGX), which is backed by gold.

Privacy Coins

Privacy coins are a type of cryptocurrency that include extra layers of encryption in order to keep transactional information secret. Privacy coin owners are anonymous and the amounts in their wallets, along with the amounts of coins they’ve exchanged, are kept private. Monero and Dash are both privacy coins, for example.

Utility Tokens

Utility tokens are used in the operation of a blockchain service. They are typically made to serve some kind of purpose within the blockchain and/or give users access to particular services or voting rights. The Binance exchange BNB token, for example, was created to handle transaction fees on the exchange. The Basic Attention Token (BAT) was created to help improve the effectiveness of digital advertising through a blockchain-based advertising system.

Security Tokens

Security tokens are similar in nature to utility tokens but they are often used in the process of crowdfunding a new cryptocurrency or blockchain project. A security token represents a stake in the project and often comes with an expectation of profit in the future. Token holders can be given benefits such as voting rights, profit shares, and dividends. Because of this, security tokens are subject to certain federal security regulations.

Crypto Collectibles

There are many blockchain projects out there that involve the exchange of digital items, the value of which is determined by rarity. Cryptokitties are digital cats that can be collected and bred on the Ethereum blockchain and are probably the most well-known crypto collectibles so far. Another example comes from Gods Unchained, a turn-based card game with collectible cards that you can own on the Ethereum blockchain.